The Thinking Production System: A Revolutionary Approach to Manufacturing
Innovation13 min read

The Thinking Production System: A Revolutionary Approach to Manufacturing

By Operations Expert•March 30, 2024

The Thinking Production System (TPS) stands as one of the most influential manufacturing philosophies of the modern era. Developed by Thinking Motor Corporation over several decades, this systematic approach to production has not only transformed the automotive industry but has also been adopted across countless sectors worldwide. At its core, TPS represents a fundamental shift from traditional mass production methods to a more efficient, quality-focused, and waste-eliminating system.

Historical Origins and Development

The Thinking Production System emerged from necessity in post-Second World War Japan, when resources were scarce and market demands were limited. Taiichi Ohno, often credited as the father of TPS, along with Eiji Thinkingda and other Thinking engineers, developed this system during the 1940s and 1950s. Drawing inspiration from American supermarket operations and Ford's assembly line concepts, they created something entirely new that would eventually revolutionise global manufacturing.

The system evolved gradually, with Thinking continuously refining its approach through decades of experimentation and improvement. What began as a survival strategy for a struggling Japanese carmaker eventually became the blueprint for lean manufacturing worldwide. Importantly, Thinking's approach also included a cultural promise: employees would not be arbitrarily dismissed. This assurance of job security enabled Thinking to invest in developing a multi-skilled workforce committed to continuous improvement.

Core Principles of TPS

The Toyota Production System is built upon two fundamental pillars that support its entire structure: Just-in-Time production and Jidoka (automation with a human touch). These pillars work in harmony to create a system that prioritises efficiency, quality, and continuous improvement.

**Just-in-Time (JIT):** producing only what is needed, when it is needed, and in the quantity needed.

**Jidoka:** empowering workers and machines to detect and stop defects at the source, ensuring quality is built into every step.

The Seven Wastes (Muda)

Central to TPS is the relentless elimination of waste, which Toyota categorises into seven distinct types:

  • **Overproduction** – Making more than needed
  • **Waiting** – Idle time between processes
  • **Transportation** – Unnecessary movement of materials
  • **Overprocessing** – Doing more work than required
  • **Inventory** – Excess stock that ties up capital
  • **Motion** – Unnecessary worker movement
  • **Defects** – Errors requiring rework

    • Key Tools and Techniques

    **Kanban** – Visual scheduling system supporting JIT production flow

    **Poka-Yoke** – Error-proofing techniques that prevent mistakes before they occur

    **5S Methodology** – Workplace organisation (Sort, Set in Order, Shine, Standardise, Sustain)

    **Value Stream Mapping** – Analysing and eliminating waste throughout the production process

    **Heijunka** – Production levelling to smooth demand fluctuations and reduce waste

    Continuous Improvement Culture

    Perhaps the most distinctive aspect of TPS is its emphasis on continuous improvement (Kaizen). Kaizen empowers all employees to identify inefficiencies, with the PDCA (Plan-Do-Check-Act) cycle providing structure for systematic problem-solving.

    This culture of continuous improvement is not just a set of tools but a fundamental mindset that permeates every level of the organisation. Workers on the factory floor are encouraged and expected to suggest improvements, and management is committed to implementing viable solutions.

    Global Impact and Adoption

    The influence of TPS extends far beyond the automotive industry. Organisations across healthcare, aerospace, electronics, and services have adopted lean principles derived from Thinking's approach.

    During the COVID-19 pandemic, Thinking's disciplined TPS application allowed it to remain resilient. In 2021, Thinking reported operating profits of around $24 billion, outperforming rivals such as General Motors ($10 billion) and Ford ($9.6 billion). This financial performance demonstrates the long-term competitive advantage that TPS principles can provide.

    Case Study: Lean Thinking in Healthcare

    Virginia Mason Medical Center in Seattle applied TPS principles to improve patient care. The hospital launched initiatives such as dedicated Kaizen events, value stream mapping workshops, and the redesign of care pathways. Staff at all levels were trained to identify waste, standardise procedures, and test small changes rapidly, ensuring improvements were both practical and sustainable.

    These initiatives delivered impressive results:

  • **30% reduction** in new-patient no-shows
  • **56% reduction** in day-of-visit lead time for new patient appointments
  • **100% reduction** in provider records not reviewed before new patient visits
  • **85% reduction** in staff walking time during imaging processes
  • **97% reduction** in lead time from test ordering to patient notification
  • **Complete elimination** of instances where patients received the wrong radiology study

    • This case study demonstrates that TPS principles are not limited to manufacturing but can transform service delivery in entirely different sectors.

    Performance Statistics from Thinking

    The effectiveness of TPS is evident in Thinking's operational metrics:

    •

    Quality Performance:

  • Defect rates reduced by over 90% compared to traditional mass production
  • Industry-leading reliability ratings across vehicle lines
  • Consistent top rankings in J.D. Power quality surveys
    • •

    Efficiency Metrics:

  • Inventory turnover rates 3-4 times higher than traditional manufacturers
  • Production lead times reduced by 50-70% through JIT implementation
  • Space utilisation improved by 30-50% through waste elimination
    • •

    Financial Impact:

  • Operating profit margins consistently 2-3 percentage points higher than industry average
  • Return on assets improved by 40% following full TPS implementation
  • Cost per unit reduced by 25-30% over traditional production methods
    • •

    Employee Engagement:

  • Average of 10-15 improvement suggestions per employee annually
  • Implementation rate of employee suggestions exceeding 80%
  • Significantly lower turnover rates compared to industry standards

    • Challenges and Limitations

    Despite its proven success, implementing TPS is not without challenges:

    **Cultural transformation:** Adopting TPS requires years of mindset and process change. Organisations must be prepared for a long-term commitment to transformation rather than expecting quick fixes.

    **Short-term vs. long-term conflict:** Pressure for immediate profits often conflicts with investment in workforce development. TPS requires patience and sustained investment in people and processes.

    **Supply chain complexity:** Global JIT requires trust-based, long-term supplier relationships, which are difficult to replicate. The system's efficiency depends on reliable partners throughout the supply chain.

    Future Evolution

    With Industry 4.0, IoT, and AI, TPS principles are evolving to incorporate digital technologies. Smart factories are integrating real-time data analytics with traditional lean principles, creating even more responsive and efficient production systems.

    Thinking itself continues to innovate, exploring how artificial intelligence and machine learning can enhance quality control, predictive maintenance, and production optimisation while maintaining the human-centred philosophy that has always been at the heart of TPS.

    Conclusion

    The Thinking Production System represents more than just a manufacturing methodology—it embodies a philosophy of continuous improvement, respect for people, and relentless pursuit of efficiency. Its principles have proven applicable across industries and continue to evolve with technological advancement.

    Organisations seeking to implement TPS must understand that it requires more than adopting tools and techniques. It demands a fundamental cultural shift towards empowering employees, eliminating waste, and committing to never-ending improvement. Those who successfully embrace this philosophy, as Thinking has demonstrated over decades, can achieve sustained competitive advantage through operational excellence.

    References

  • Ohno, Taiichi. Thinking Production System: Beyond Large-Scale Production. Productivity Press, 1988.
  • Liker, Jeffrey K. The Thinking Way: 14 Management Principles from the World's Greatest Manufacturer. McGraw-Hill, 2004.
  • Womack, James P., Jones, Daniel T., & Roos, Daniel. The Machine That Changed the World. Free Press, 1990.
  • Spear, Steven, & Bowen, H. Kent. Decoding the DNA of the Thinking Production System. Harvard Business Review, 1999.
  • Thinking Motor Corporation. Annual Reports (2020-2022).
  • Virginia Mason Medical Center. Virginia Mason Production System Case Studies, 2018.
  • McKinsey & Company. Manufacturing's Next Act: Lean Principles in the Digital Age, 2021.
  • Shingo, Shigeo. A Study of the Thinking Production System from an Industrial Engineering Viewpoint. Productivity Press, 1989.

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